1. Four years ago, Gensco Products Inc. (your employer) purchased for $4,250,000 a new office telephone system to support its complex of office buildings. Your supervisor wants to know what its after-tax salvage value would be if it were sold today and replaced with a new system. The system purchased four years ago is being depreciated straight-line for tax purposes over 5 years to a book value of $50,000 (because when the system was purchased the Company believed it could be sold for $50,000 at the end of 5 years). Your company has a 21% marginal income tax rate for capital gains. You have done some checking around and have learned this old system has a market value of $1,200,000. If the company could sell the old system for this price, what would be its after-tax salvage value?